• Home
  • Get A Quote
  • Customer Service
  • Refer a Friend
  • About Us
  • Location Map
  • Employee Directory
  • Privacy Policy
  • Contact Us
Call Us CALL US | (803) 430-9002
Home
  • Home
  • Products
    • Automobile
    • Business & Commercial
    • Bonds
    • Contractors Insurance
    • Disability Insurance
    • Flood
    • Health
    • Homeowners
    • Life
    • Motorcycle
    • Recreational Vehicle
    • Renters
    • Surety Bond
    • Trucking
  • Get a Quote
    • Auto Insurance Quote FormsImage of right arrow
      • Bundled Auto & Home Insurance Quote
      • Instant Auto Insurance Quote
    • Bond Request Form
    • Business & Commercial Insurance Quote FormsImage of right arrow
      • Commercial Auto Insurance Quote
      • General Liability Quote Form
    • Contractors Quote Form
    • Flood Quote Form
    • Health Insurance Quote Forms
    • Disability Insurance Quote
    • Homeowners Insurance Quote FormsImage of right arrow
      • Get an Instant Home & Auto Quote Now!
      • Get An Instant Homeowners Quote Now!
    • Life Insurance Quote FormsImage of right arrow
      • Get an Instant Life Quote Now
      • How Much Life Insurance Do You Need
    • Motorcycle Insurance Quote
    • Recreational Insurance Quote Form
    • Renters Insurance Quote
    • Surety Bonds
    • Trucking
  • Blog
  • Resources
    • Make a Payment
    • Refer a Friend
    • Important Files
    • Insurance Glossary
  • About Us
    • About Us
    • Location(s)
    • Employee Directory
    • Testimonials
    • Privacy Policy
  • Contact
Auto Insurance AUTO

Auto insurance protects you against financial loss if you have an accident.

Read More
Homeowners Insurance HOME

A standard policy insures the home itself and the things you keep in it.

Read More
Business Insurance BUSINESS

Discover the perfect insurance options to meet your specific and unique needs.

Read More
Contractors Insurance CONTRACTORS

Learn about different health coverage options that fit your specific needs.

Read More
Recreational Insurance RECREATIONAL

Finding insurance doesn't have to be difficult. We do the work for you.

Read More
Life Insurance LIFE

Browse a variety of insurance options in order to find the right one for you.

Read More
Home > Blog > Understanding Lender Requirements for Home Insurance
FRIDAY, APRIL 9, 2021

Understanding Lender Requirements for Home Insurance

outside of a homeYour home could experience a disaster at any given time, even when you least expect it. That’s why you have homeowners insurance. It’s there to help you afford to pick up the pieces of these challenges so that you never suffer an undue financial setback. 

It’s important to realize that sometimes you aren’t the only one who has an investment in your home. If you took out a mortgage when you bought the property, then your bank wants to see your property made secure as well. As a result, they will usually require you to buy homeowners insurance. They have a very simple reason for doing so, and here’s how it works. 

Protecting Your Investment in Your Mortgage 
By mortgaging your home, you rely on a bank to provide you with the loan to buy the property, and you are then responsible for repaying the loan to the bank. However, for as long as you have the mortgage, your bank has an investment in your home, and they want to keep it secure. As a result, they will usually require you to buy home insurance. 

Consider a scenario where you take out a mortgage worth $350,000. That is a $350,000 debt that the bank has assumed on your behalf. Therefore, they expect you to repay that money to them, which is why they might foreclose on you if you stop paying your mortgage. 

Still, consider what would happen if major property damage occurs in your home. Would you struggle to repay your mortgage? Would the repairs set you back a pretty penny? If so, that would lead to financial struggles that could put your ability to both repay your mortgage and live in the property in limbo. This makes the lender’s ability to recoup their investment a lot more difficult. 

However, home insurance is there to keep all parties in the deal on a stable financial footing. It will help you repair any property damage that might occur, and if your home itself is a total loss, then your plan will help you rebuild it. 

Depending on the nature of the property damage, your lender might be able to demand that remittance be made to them. This will usually occur when you decide that you should cut your losses and not rebuild your home. The settlement will go to the insurer and be used to pay off the outstanding debt on your mortgage. Therefore, they won’t suffer an undue loss just because you didn’t choose to rebuild. 

Still, regardless of whether your lender requires home insurance, you should still invest in it. All in all, it’s there to assist you in case of property damage, and ultimately can make you much more secure in your home. Don’t hesitate to work with your agent to get the policy that is best for you. 

Posted 7:19 PM

Tags: home insurance
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2025
  • 2024
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2012

  • affordable insurance group(52)
  • insurance(43)
  • auto insurance(41)
  • home insurance(34)
  • coverage(24)
  • car insurance(16)
  • protection(11)
  • tips(9)
  • life insurance(8)
  • home(7)
  • life(7)
  • winter(6)
  • claims(6)
  • homeowners insurance(6)
  • homeowner(6)
  • business insurance(5)
  • loss(4)
  • weather(4)
  • safety(4)
  • sr-22 insurance(4)
  • policy(4)
  • rv insurance(3)
  • flood insurance(3)
  • repairs(3)
  • risk(3)
  • bop insurance(2)
  • renters insurance(2)
  • options(2)
  • motorcycle insurance(2)
  • finances(2)
  • boat insurance(2)
  • quote(2)
  • construction(2)
  • auto(2)
  • claim(2)
  • accident(2)
  • exclusions(2)
  • theft(2)
  • damage(2)
  • women(1)
  • prevention(1)
  • gaming systems(1)
  • autonomous vehicles(1)
  • home insurance exclusions(1)
  • transmission(1)
  • fraud(1)
  • loans(1)
  • requirements(1)
  • family(1)
  • class c vehicle(1)

View Mobile Version
Facebook
Twitter
LinkedIn
Yelp
ASI Homeowners of America National General Progressive Stillwater The Hartford The Main Street Travelers Zurich

Resources

Home About Us Get a Quote Make A Payment Newsletter Refer A Friend Contact Us

Contact Us

Affordable Insurance Group
  • Affordable Insurance Group
  • 6168 Saint Andrews Road
  • Columbia, SC 29212
  • O:(803) 430-9002
  • F:(803) 798-5100
  • E: info@affordableinsgrp.com
© Copyright 2020. All rights reserved.
Powered by Insurance Website Builder